Biscuit baron

YOGESH GOLE

Aurangabad, July 16: Yashraj Peety fancied to be a professional footballer when he was in the tenth but coming from a prominent industrial family from Jalna he was destined to be a successful industrialist. Once he joined college, he became very much aware of his entrepreneurial ambitions. Armed with a degree in entrepreneurship strategy and operations from Newcastle University, London and Master of Science in Finance with specialistion in corporate finance from Brandeis University, United States, he is today successfully working as Chief Operating Officer of Divya SRJ Foods LLP, the biscuit manufacturing unit of the SRJ Group.

Q: You have steel industry background. What made you turn to biscuit manufacturing?

A: During my summer breaks while pursuing graduation, I visited our factory to grasp basics of business operations. My grandfather introduced me to the idea of biscuit manufacturing. Coming from the commodity background, this was out of my imagination. I was very fascinated by the food production and so was entrusted with the responsibility of this Greenfield project. Recently, I have joined steel business also and learning its dynamics.

Q: How did you prepare for the biscuit business?

A: It was my responsibility to connect with partners, my team and contract manufactures as we were new to this business.

I interned with my partner at Hyderabad and learned about realities of the biscuit manufacturing. I studied principles and policies of the food business. It’s been five years now that I am in this industry. We manufacture all kinds of biscuits including cream, crackers, salt, coconut and marie. We are also planning to manufacture expert-oriented heavy fat products. Currently, we are entirely focused on serving Patanjali Foods and supply 25 per cent of their entire biscuits needs in India. We have also worked with Britannia, Government of Maharashtra and a couple of local brands.

We have installed capacity of 4000 tons a month and expecting to reach production of 3000 tons soon.

Q: What are major challenges before the biscuit industry today?

A: Cost of raw material has gone up by 14-15 per cent in a span of year and a half due to rise in plastic, oil, packaging, diesel and freight rates. We have achieved 20 per cent volume growth so there is no significant bad growth but improving thin margins amid extreme volatility is a major challenge.

Oil, aata (whole wheat flour) and sugar are major requirements and flavours, emulsifiers, leavening and raising agents are other components.

Q: What is your opinion on Family Management Businesses?

A: My experience of working in an FMB as a third generation representative is mixed one. Divya Foods was a completely different business for us. If it were steel or related product, I would have had seniors in the family to guide me. For biscuits, it was my job to understand what was wrong and right in the first place, to design a matrix for the business. I remember week one into work, we had a new team and packing and product managers came to me asking me which was the right packaging. I did not have any experience and it took me time to overcome situation. I did a course in biscuit technology to know characteristic of baking and how an oven works.

The second aspect with FMB is it’s not a corporate or an individual job. Your entire dedication, focus and energies have to be on creating value for the people coming after you, unless you want to sell. So, we always think long term, love creating asset base and building on it.

Q: What are your memories as a child witnessing the steel business growing?

A: My grandfather Shantilal Peety set up the first unit in Jalna with capacity of 2 tons of steel a day in 1971. Today, we produce 1000 tons a day. I vividly remember three directors of SRJ Peety – Surendra, Ravindra and Jitendra - sitting with my grandfather holding animated discussions.

Q: Your opinion about Jalna as an industrial destination.

A: It’s a descent industrial hub. Infrastructure for steel is very good and raw material available is immense. There are lots of incentives as government is taking efforts to promote industry. Projects like dry port and Samruddhi Highway augur well for growth. I cannot follow the mindset of elder generation of working 16-17 hours a day. I will do best for 10 to 12 hours and have something worthwhile do in the rest. Jalna is missing this aspect.